2014 Interim Results

July 24, 2014

Yorkshire Building Society has today announced a very strong first half performance for 2014, increasing core operating profit by 30% and new lending by 50%, providing almost one-fifth of UK net mortgage lending in the period1.

In its 150th anniversary year, the UK’s second largest building society has continued to deliver on the aims for which the organisation was first established by helping people to save for the future and buy their own home.

It has also remained true to its community values by creating almost 200 new jobs and establishing a major new charity campaign in aid of Marie Curie Cancer Care.

These exceptional results reflect our ongoing success as a business which proudly puts mutual values at its core.

Our 150th anniversary has been a terrific opportunity for everyone associated with the Group – colleagues and customers alike – to reflect on how we have maintained our fundamental purpose at the same time as growing as an organisation.

Achieving good levels of profit allows us to continue to invest in the future of the Group and make our offer to customers even stronger, for example ensuring a smooth transition to comply with the new Mortgage Market Review (MMR) rules with fully trained advisers available across our branch network and via our telephone contact centre.

We have also successfully delivered in our core business areas – completing more than 16,000 mortgages, opening more than 100,000 savings accounts at a time of historically low interest rates, growing the N&P current account customer base and continuing to provide no-obligation financial advice for all across our branch network.

It was fitting that we marked our ‘sesquicentennial’ by becoming an official supporter of the Tour De France’s Grand Départ in Yorkshire earlier this month. It was a wonderful occasion for the region and one which helped to significantly raise the Group’s profile, with millions lining the route and billions watching on television.

Being involved in something as big as the Grand Départ reflects the ambition and size of the business we have become, which is one reason we unveiled new branding for the Group as part of our ongoing investment programme. Fresh logos have been created across all brands to emphasise that we form a single, cohesive and substantial organisation which plays a significant part in people’s lives across the whole of the UK.

The positive effect we can have on local communities is reflected in our support for charities and good causes and we have recently launched our most ambitious fundraising drive. We have set a target of raising £500,000 for Marie Curie Cancer Care by December 2016 through our Hour of Need campaign. Every £20 will fund one hour of care and raising enough to pay for 25,000 hours of vital support will be an incredible achievement and one I am confident we will rise to.

We remain as committed to our members today as the founders of the Society from which we trace our roots 150 years ago. It is a proud heritage and one which we intend to enhance further in the coming years.

2014 interim results highlights

Delivering an award-winning customer experience

Achieved 1,104 best buy mortgage mentions and 709 best buy saving account mentions across the Group5

Average savings rate of 1.79%, continuing to remain higher than the industry average (1.51%)6

Provided support for those getting on the housing ladder, with 38% of house purchase mortgages taken out by first time buyers, including those with 5% deposits

Continued to help borrowers make their money go further by providing 34% of all UK offset mortgages7

Maintained support for small and medium sized enterprises through provision of commercial mortgages, with gross lending totalling £62.8m (June 2013: £32.2m)

Earned a total of 12 industry awards across the Group for mortgages, savings and current account including First Time Mortgage Buyers Choice (Consumer Moneyfacts), Best Regular Savings Account Provider (Savings Champion) and Best Debit Card for Use Abroad (Moneynet)

Further increased the number of N&P current account customers, as well as being shortlisted for a Which? Award.

Achieved efficient use of funding, leading to increased net interest margin of 1.57% (June 2013: 1.23%).

Making it easy and simple for our customers

Ensured a smooth transition to comply with the Mortgage Market Review (MMR) regulations by having changes required in place a month before the deadline date

Introduced new branding which unites all parts of the Group and helps new and existing customers understand the benefits of being part of a larger organisation

Made improvements to 48 branches, with 87 more due to be refurbished by the end of the year

Introduced uniforms for colleagues across branches of the Yorkshire, bringing them in line with our other building society brands.

Offering a leading experience for our people

Continued the refurbishment of our principal office in Bradford to provide modern working environment for approximately 800 colleagues, with 700 more due to move in by the end of the year

Created 192 new jobs, taking the total number of employees to 4,525 (December 2013: 4,333)

Completed almost 13,000 days of colleague training and development

Maintained our Investors in People status, reflecting our good people management practices.

Making a positive impact on our communities

Won a Gold award at the International CSR Awards for charity support

Donated £1,179,748 to more than 320 different charities and local good causes, including £896,000 from contributions based on savers’ affinity account balances and £133,000 from our Charitable Foundation, which is in majority funded by the Small Change Big Difference® scheme

Over 90% of the Charitable Foundation donations were nominated by members

Total of 2,684 employee hours spent volunteering with charities, local schools and good causes in the communities where we are based.

2 Following the introduction on 1 January 2014 of Basel III, which is a global regulatory standard on the capital adequacy of financial institutions, Common Equity Tier 1 replaced Core Tier 1 as the key measure of capital strength.

3 Source: Nunwood. Net Promoter Score refers to the net percentage of customers who, when responding to the question ‘how likely are you to recommend us to friends and family’ would either strongly recommend or strongly detract from the organisation.

5 Source: Presswatch Financial from Kantar Media between 1 January and 30 June 2014.

6 Source: Average rates based on Savings stock from CACI’s Current Account and Savings Database, currently covering 85% of retail savings market. Data as at 31 March, 2014.

7 Source: Based on those UK lenders writing offset mortgages that contribute to the CACI Mortgage Market Database, which covers 94% of the UK residential mortgage market. Data based on new mortgages by volume between 1 January to 30 April 2014.

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Yorkshire Building Society is a member of the Building Societies Association and is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Yorkshire Building Society is entered in the Financial Services Register and its registration number is 106085. Head Office: Yorkshire House, Yorkshire Drive, Bradford BD5 8LJ.

References to 'YBS Group' or 'Yorkshire Group' refer to Yorkshire Building Society, the trading names under which it operates (Chelsea Building Society, the Chelsea, Norwich & Peterborough Building Society, N&P and Egg) and its subsidiary companies.

Egg is a registered trademark of Yorkshire Building Society.

End Youth Homelessness (EYH) is a national movement of local charities working together to end youth homelessness in the UK. EYH trades through its designated Administrator, Centrepoint (charity number 292411).

Small Change Big Difference® is a registered trademark of Yorkshire Building Society.

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